With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The below table shows the difference in USD you would have achieved when buying £200,000.00 during the high and low points of the past month.
|Currency Pair||% Change||Difference on £200,000|
Whilst endlessly dividing opinion, especially within the NFL at the moment, US President Donald Trump has overseen the US economy whilst stock markets soar to record highs and the US unemployment level has hit record lows.
He’s been quick to take credit for this, and just yesterday via his preferred choice of social media which is Twitter in case you haven’t heard, he highlighted that since his inauguration Equity Markets in the US have risen by 25%, and the unemployment level has hit a 16-year low.
Some analysts have picked up on Trump's claims, and it turns out that Obama oversaw a similarly impressive stock market performance in his 2nd term election. To tie this back into currency and the value of the greenback, I expect to see further US Dollar strength should this strong economic performance continue.
A couple of potential stumbling blocks for the Dollar could be whether the North Korean situation surfaces once again, which I certainly wouldn’t rule out. Also whether or not the Fed Reserve choose to hike interest rates for a planned third time before the new year will also likely determine sentiment towards the US and therefore, USD value.
The US Dollar is likely to be the busiest major currency this week in terms of price movement, simply owing to the high volume of economic data out of the US over the next couple of days.
At 1.30pm today the Producer Price Index, both Month on Month and Annually will be released. This covers price changes within the US and is a good reading of commodity inflation.
At the same time Initial and Continuing Jobless claims will be released with an expected 251k new jobless claims expected.
Two members of the FOMC (Federal Open Market Committee) will be speaking this afternoon also, so expect any references towards future monetary policy to potentially result in price fluctuations.
At 7pm, outside of our market hours the Monthly Budget Statement for September will be released, so it may be worth looking into setting up a Limit Order in order to capitalise of any positive movements outside of market hours should they occur.
There will be Inflation figures and Retail Sales data released at 1.30pm tomorrow, as well as another member of the FOMC speaking afterwards.
If you have an upcoming requirement involving the US Dollar I would strongly suggest getting in touch in case any of these releases result in major swings for USD rates.
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